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On Bundling Choices

In Capitalism and Freedom Milton Friedman makes the point that if “we” vote for things on a case by case basis we are likely to make vastly different choices than if we voted for things that are bundled together. In his book he is talking about this in his defense of monetary policy rules versus discretion, but I am interested in the idea more generally.

For example, suppose we in society were asked to vote on whether we should allow each of the following activities:

  1. The Military Draft
  2. Posting of Offensive Signs in Your Yard
  3. The Sale of Cocaine Over the Counter
  4. Paying off State Troopers to evade a speeding ticket
  5. Marriage between two members of the same sex

If each of these items were voted on in a case by case fashion, my expectation is that each of them would be defeated, with the possibility of #2 being voted in favor of allowing due to some people still hanging onto a notional thread of what free speech is supposed to imply.

Imagine however that instead of voting for each of these, we were tasked with selecting to allow either none of the bundle or all of the bundle. I would argue (as did Friedman) that it is highly probably that a majority of Americans would vote in favor of allowing the bundle. This is ironic, no? When considering each idea on a case by case basis, people would vote in exactly the opposite way they would vote when considering these together.

Why?

The answer has to do with whether you feel like you are in a minority or a majority when you are making your decisions. When you vote on a case by case basis, you are likely to feel much less strongly about denying someone a right to do something when you are in the majority. Alternatively, when you are in the minority, you are likely to feel much more strongly about being deprived of something that you are in favor of.

To illustrate the point – consider your feelings about cocaine. You are likely in a majority of Americans who believe it ought to remain illegal to produce and consume – so when you vote against allowing the sale and consumption of cocaine you do not feel any sense of injustice, or suffer much of a moral qualm with the view that “everyone knows cocaine is bad.” Now, it is very plausible that a majority of Americans feels similarly about allowing each of these items above. On average more people oppose the draft than favor it. On average, more people disapprove of allowing offensive signs than not. On average more people disapprove of bribing troopers. And on average, as recent elections have shown, more people disapprove of same sex marriage than approve of it.

Now however, when you are asked to vote on the bundle as a whole, you are going to feel a lot more strongly about the possibility of being denied the possibility of doing something you in fact favor. You might think that the costs of the drug war are so high that you think legalizing cocaine would lessen the severity of the drug problem. Or you might be in favor of allowing same sex marriage. So in order to preserve those things that you cherish, you go along and vote for the whole bundle.

Another factor operating in the interest of voting for the bundle is that often the cumulative or combined effects of policies are very different than the impacts of each policy taken on a case by case basis (this argument makes much more sense in the context Friedman wrote about it). For example, suppose I dropped (1) and (4) from my list above. If we strike down each of the other 3 items on a case by case basis it would be an enormous blow against the freedom of association, a freedom which provides a rich environment for the cultivation of new ideas, and experimentation. We only appreciate that culture now because it is one in which we generally allow freedom of association. Thus, if we examine each of the above on a case by case basis and strike one down – we are likely making the wrong decision from the standpoint of promoting a dynamic, free and tolerable society.

How does this thinking apply to political choices? That will be the subject of tomorrow’s short post.

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